The Local Government Pension Scheme (LGPS) is available to all Welsh County Council or County Borough Council Councillors who are offered membership of the Scheme under their council’s scheme of allowances and who are under age 75.
The LGPS is a secure Scheme because the benefits are guaranteed by law. The benefits you get when you retire are based on the number of years you have been a member of the Scheme and your average pay as a councillor. The benefits are not dependent on share prices and are not affected by stock market fluctuations.
How do I join the LGPS?
It is your decision whether to join the Scheme or not although you have to be under age 75. You need to complete an Opt In form to join the scheme, which you can get from your payroll section, and provide us with your original birth certificate.
You should also complete a Death Grant Expression of Wish Form, this allows you to nominate beneficiaries to receive a lump sum death grant in the event of your death.
To access an Opting In form please click here
To access a Death Grant Expression of Wish form please click here
Can I join if I already pay into another pension?
Yes - you can pay into as many different pension schemes as you want. You can pay up to 100% of your taxable earnings in any one tax year (or £3600 if greater) into any number of pension arrangements of your choice and be eligible for tax relief.
What do I pay?
You pay 6% of your allowances1 as a councillor into the LGPS. If you pay tax you will get tax relief on your contributions at the time they are deducted from your allowances and if you pay National Insurance you will pay a lower rate of NI contributions up to State pension age. Your council pays the rest of the cost of providing your LGPS benefits, which costs the council about double the amount you pay.
What are the benefits?
- Life cover from the moment you join, with a lump sum of 2 times your career average pay being paid if you die in service.
- Cover for your family with a pension for your husband, wife or civil partner2 and for eligible children should you die.
- Retirement Benefits after 3 months membership:
- You can retire from office and draw your pension at age 603 or over, even though the Scheme’s normal pension age is 65. It’s also possible to retire from age 503 and receive your benefits immediately, but only if your council gives their consent.
- Immediate benefits are payable at any age if you have to retire because of permanent ill health.
When you retire you can look forward to:
- A tax-free lump sum, and
- A pension for life that increases with the cost of living
How are benefits worked out?
Your LGPS retirement pension when you retire is calculated as 1/80th of your career average pay for each year of membership of the LGPS i.e.
Annual pension = Membership in the LGPS x Career Average Pay
Plus you get a lump sum of 3 times that amount i.e.
Lump Sum = 3 x Annual Pension
You can, if you wish, give up some of the pension when you draw your benefits in order to get a bigger lump sum. Up to 25% of the capital value of your pension benefits may be taken as a lump sum. You receive £12 lump sum for each £1 of pension given up.
What is career average pay?
This is your allowances1 as a councillor for each year or part year ending 31 March increased (other than the final years pay) by the rise in the Retail Prices Index between the end of the relevant year and the end of the month in which you leave the Scheme.
The aggregate of each year’s revalued pay is then divided by the total number of years and part years you have been a member of the LGPS to arrive at a career average pay. This is used in the calculation of your LGPS benefits.
Can I transfer previous pension rights into the LGPS?
You cannot transfer previous pension rights into the LGPS from another pension scheme, personal pension plan, another LGPS fund or from LGPS membership as an employee. If you have LGPS pension rights from a previous period of councillor membership in the same LGPS Fund you can join them to your current councillor membership but only within 12 months of rejoining the Scheme, or longer if your council allows.
What happens if I leave before retiring?
If you have at least 3 months membership and you leave before becoming entitled to the immediate payment of your benefits, they will be deferred for payment, normally until age 65. You may be able to transfer your LGPS benefits to another pension scheme, although you cannot transfer them to another LGPS Fund or join them to any membership of the LGPS you might take up as an employee.
If you have less than 3 months membership you may be able to claim a return of contributions less tax and an amount for National Insurance.
1 In Wales it is your basic and special responsibility allowance. It does not include any dependants’ carers allowance, travelling and subsistence allowance, or co-optees allowance.
2 A civil partnership is a relationship between two people of the same sex ("civil partners") which is formed when they register as civil partners of each other.
3 Benefits payable before age 65 will be paid at a reduced rate.
Can I pay more to improve my pension benefits?
You can increase your benefits by making additional voluntary contributions (AVCs). Also, you may be able to pay contributions into a personal pension plan or stakeholder pension scheme.
A Scheme Guide is available by clicking here or by contacting the Pension Helpdesk on 01443 680611.
Further information on the Councillor's Pension Scheme can be found on the LGPS member website by clicking here.